This section illustrates the distribution of JRT among full-time employees and shows that even though previous studies have separated between general and firm specific training it does not make sense in a Danish context. Furthermore I use simple statistics to see if the theoretical and empirical claim - JRT increases the wage return - holds for the Danish data. Finally, due to previous studies claim of selection problems the likelihood of receiving training and separating from a job is analysed. As an extension workplaces’ JRT offers are compared to the employee’s likelihood of receiving JRT,
because the selection into training is dependent on the employee’s and the employer’s preferences for JRT.
Given previous studies results that wages and JRT are strongly correlated with gender and educational background all the following descriptive statistics are made separately for gender and education.
JRT distribution
As described in section 5 the analysis uses a sample of Danish employees who are full-time employees from 1994 to 1996 and who either stay at the same workplace for three years or change workplaces in 1996. Table 1 shows the selected sample include employees who on average receive more JRT, have a higher wage income, but not wage growth, and who separate less from their workplaces compared to average employees.
The following description focuses on the characteristics of the selected sample of employees. Table 2 illustrates that over 55 percent of Danish men and over 60 percent of Danish women received JRT in 1995. Clearly more women receive JRT than men. The majority of women and men receive 1 to 10 days of JRT within the year.
Furthermore, over 10 percent of the employees who receive JRT receive over 20 days of training within a year.
Table 2 also illustrates the positive correlation between the percentage of employees receiving training and educational skills. Thus, among the group of employees with further education, 74 percent of men and 83 percent of women receive JRT within 1995. Whereas among the non-educated only 47 percent of men and 45 percent of women received JRT.
JRT includes education and training both inside and outside the workplace, but JRT does not include the informal training that an employee receives while doing his or her job assignment. Thus, the often used geographical criterion for separating general and firm specific training is not possible with the Danish data.
Instead the cost information with respect to JRT could be used as a criterion. Following
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employer.24 At the same time most of the employees claim that there skills can be applied in other workplaces. Therefore it does not seem appropriate to separate between general and firm specific JRT by JRT expenses.
Wages and JRT
International studies in section 3 and the theoretical models in section 2 illustrated a positive correlation between JRT and wages. The simple statistics in Table 2 support to some extent the theory, because employees who receive more than one day of JRT have on average higher yearly wage income. However, it does not support the theory that the employees who receive only one day of JRT have an average yearly wage income less than the employees who receive no JRT. The correlation between JRT and average wage growth are similar to correlation between yearly wages and JRT. One exception is the low wage growth among women who receive between 11 and 20 days of JRT.
Among educational groups the employees who receive JRT also on average receive a higher yearly wage except for the men with further education. The wage growth is even more puzzling, because only men and women with a vocational education and women with no education have on average a higher wage growth when receiving JRT.
Studies have shown that empirical estimates of the effect of JRT can be biased due to the correlation between individual heterogeneity and wages (i.e. training selection). In table 3 columns 2 and 3 show the likelihood of receiving JRT among men and women. The results indicate that both young women and men are more likely to receive JRT. The employees that have a further education are more likely to receive JRT. Not surprisingly working in a high paying occupational group (i.e. often the most educated) increases an employee’s probability of receiving JRT, too. For women only the just mentioned characteristics influence the likelihood of receiving JRT, whereas men are influenced by more socio-economic and workplace characteristics. Clearly men, living as a couple with long employment experiences, and working in big private industry workplaces such as wholesale, finance and services are more likely to receive JRT. The characteristics that influence the likelihood of receiving JRT among Danish employees are also found in other countries. For example, the positive effects of long work experiences and big companies or departments are especially found in other JRT
24 Previous studies found that most JRT is financed by employers (Loewenstein and Spletzer 1999)
studies (appendix 1 table C: Blundell et al. 1996; Lynch 1992; Maximiano and Oosterbeck 2006). However, many previous studies find that union membership increases the likelihood of receiving JRT. For Danish employee unions, membership has no significant effect.
The selection into training is most likely analyzed by looking at employee information. However, an employee’s decision with respect to JRT and job separations depends on the decisions of their employer, too. Suppose the employee wants to receive JRT but his or her employer will not finance it. According to the above results the employee would either not take the JRT, maybe pay for the JRT himself or herself, or simply quit the job due to lack of JRT. This employee-employer interaction influences the selection into JRT and thereby also the return to JRT. Therefore it is interesting to look at the preferences for offering JRT among employers, which is the main focus in the following descriptive paragraphs.
Table 4 clearly shows that workplaces to a higher extent prioritize JRT offers to employees from skilled occupational groups. Furthermore, more skilled occupational groups are offered longer periods of JRT and more money on JRT.
A simple OLS regression among interviewed workplaces illustrates the correlation between the average number of JRT days offered and workplace specific characteristics. Table 5 contains the OLS regressions for all workplaces and separate regressions for; workplaces that offer a minimum of one day of JRT, workplaces that have all occupational groups represented in their workforce, and workplaces that offer a minimum of one day of JRT and have all occupational groups in their workforce. The results are similarly independent of the selection criteria. Workplaces with affiliates, many employees, and a high percentage of skilled employees in industries such as construction and services offer more days of training. Furthermore workplaces that take many human management initiatives such as yearly employer-employee meetings, organizational changes for helping the employees, reduction of routine job tasks, and reduction of physical and psychological hard work offer a significantly higher amount
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the average wages of certain occupations are positively correlated with JRT offers among the highly skilled occupational groups (e.g. managers and high paid wage earners) but not among other occupational groups.
The analysis of JRT offers among workplaces support the findings for employees. Thus the employees who are more likely to receive JRT are also the employees that workplaces prefer to sign-up for JRT offers.
Job separation and JRT
On average, close to 30 percent of Danish employees separate from their jobs every year (Weatherall 2007). In this paper’s sample of fulltime employees who have been employed for a minimum of three years the separation rates are a lot lower – 15 percent among men and 9 percent among women. It is not surprising that the job separation rate is low because the sample does not include all the employees who separate into unemployment or who have temporary contracts and change jobs frequently (i.e. more than every second year).
Table 7 shows that the average amount of JRT and wage growth are different among employees who stay in the same workplace and employees who switch workplaces. Men separate more often from their workplaces than women. Furthermore, men and women who have a vocational education have on average received more JRT before they separate. The same is true for women with further education. In contrast non-educated women who separate from their workplaces have on average received less JRT. The statistics also clearly show that men and women who separate from their workplace have on average a higher wage growth. It is not clear if it is the separation that causes the wage increase or if it is the expectations of a future wage increase that causes the separation (i.e. endogeneity problem).
The likelihood of separating from a workplace is illustrated in Table 3.
Danish men are more likely to separate if they are young, unskilled and have short tenure. Furthermore working in big private companies for the hotel and restaurant industry increases the probability of separating from workplaces. In contrast very few socio-economic and workplace characteristics influence the separations for women. The results in Table 3 show surprisingly that single women are less likely to separate from a workplace than single women with kids. Furthermore women from relatively small
private companies are more likely to separate from a workplace. These findings are related to the specific sample of full time workers from 1994-1996 that is selected for the analysis.
The descriptive statistics indicate that there are correlations between wages, JRT, and job separations. It is therefore necessary to take these relationships into account and consider possible selection problems when picking an empirical strategy in the following section.